BACKING a WINNER: When Your Client Wins the Triple Crown

Corporate Counsel Business Journal September October 2018 ccbjournal.com BACKING A WINNER: When Your Client Wins the Triple Crown the most significant of which is China Horse Club. How many firms have a horse for a client, let In this industry, it is possible for individuals or alone a champion such as Justify? McNees IP entities to own the horse, for different individuals or group co-chair Michael Doctrow discusses the entities to own the racing rights, and others to own the firm’s work with thoroughbred clients and breeding rights. There’s a good amount of flexibility in their owners. what you can do with thoroughbred racing and the CCBJ: The horse Justify is the 13th Triple Crown ownership structure. winner and only the second undefeated horse to win the title. How did you come to represent him and What structure do you see more often? Is it usually his owners? a corporate ownership or is an individual entity more common? Michael Doctrow: We have a history of representing Triple Crown contenders, but this is our first winner. It’s really a mix. There’s very little consistency in the We’ve represented about ten thoroughbreds since we horse racing business. Some people have been able to started with Smarty Jones, who won the Kentucky buy horses for $30,000 or $40,000 and have them win Derby in 2004 and aspired to win the Triple Crown. significant races. Other times, the horses cost much From that point forward, folks at Churchill Downs and more money. with the National Thoroughbred Racing Association Corporate ownership is more common these days, began recom mending us as counsel to owners to handle given the expense involved in breeding, acquiring trademark protection and licensing matters. and maintaining a thoroughbred, but we’ve Who are Justify’s owners, and how is the ownership represented seve ral structured? horses over the last ten years that have been We’ve represented groups with a variety of ownership owned by individuals. structures. Some of those owners have been individuals, Two individuals owned and some of them have been corporations in the horse California Chrome, who racing industry. That’s the interesting thing about this won the 2014 Derby and sport. We have corporate owners, and we also have Preakness. The owner of the 2006 Derby winner, Michael Doctrow is co-chair of the individual owners. Individual owners can be one well- McNees intellectual property group. to-do person or a group of people who enjoy the sport. Barbaro, owned dozens of His practice focuses on trademark clearance, registration and For Justify, the primary owner is a company called horses at any given time. protection, copyright protection, WinStar Farms, which breeds and sells horses in In other cases, a corporate and advertising and branding strategies. Reach him at Kent ucky. Over time they sold off some ownership conglomerate or group has [email protected]. interest in Justify to several other ownership groups, owned the horse. Please describe the scope of your representation and the next steps for a horse like Justify. For Kentucky Derby winners, we represent the owners in securing and registering trademarks associated with the horse. That may involve the horse’s name, the name of the stab les or the owners, the design and colors of the silks, or the logo that appears on the jockey’s clothing. We also get involved in licensing those trademarks for use on merchandise like hats, T-shirts, cups and the like. If the horse wins the Preakness, there are some addit ional interests in licensing the horse’s name and likeness on things such as artwork and other collectible items. And we can negotiate significant sponsorship deals when companies are interested in having their name assoc iated with the horse. In this particular instance, I’m sure everyone saw the Wheels Up name on the jockey’s pants and collar as well as on the hats worn by the owners in the owners circle at the belmont. With a Triple Crown win, there are opportunities for ongoing sponsorships, particularly if, as here, the horse Aside from the Triple Crown win and the undefeated is going to be racing again. record, how has this representation been different There’s also the potential for movies, books, from other horses or owners? artwork and more expensive collectibles. Finally, and unfortunately, we have the task of ensuring This is a corporate ownership mix, so they are a little that third parties aren’t trying to trade off of the bit more professional. WinStar Farm has had horses goodwill of the horse by using its name, likeness and that have won the Kentucky Derby and other races over related trademarks for their own products without the years, so they have an understanding of what’s authoriz ation. Unfortunately, we have to go after those involved and what people are going to be requesting infringers. It’s amazing how many people think they can during the run for the Triple Crown. Then, obviously, just use the name and likeness of the horse without there have been many more business opportunities. any authorization. Significant sponsorship, movie and book opportunities This is the same type of work I do for corporate have and will continue to present themselves, so that’s clients day in and day out, but it’s compressed in a very exciting. In other years, as soon as there is a loss in short period of time, basically five weeks, so that makes one of the Triple Crown races, our work is over almost everything a bit more exciting. Also, with national TV immediately, so it’s a pleasure having the work continue, and the risks of racing, it’s an awful lot more exciting. perhaps indefinitely. We have a group of attorneys who do this work for our corporate clients every day, but you get to watch How do you see legalized gambling impacting a race and root for the client, or its horse – so it’s not this industry? like the typical launch of a new product or service. You get very excited about the client’s success, and it Gambling in general, and certainly casino gambling, creates camaraderie in the office. Everyone at McNees has helped the horse racing business. In Pennsylvania, was watching TV and rooting for Justify to win. In the at least, horse racing on its own was struggling before office, we have Justify Triple Crown hats that we were casino gambling came along to support the industry. wearing. It makes practicing law more fun. The sport is funded a great deal by taxing casinos. .

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